France's `Liberation' daily is selling out for the sake of survival

Founder Jean-Paul Sartre might roll in his grave, but the famed leftist newspaper has allowed the son of a banker to become the company's largest shareholder

DPA , PARIS

Sun, Jan 23, 2005 - Page 12

Perhaps the biggest surprise was that no one was really surprised that the staff of the fiercely left-wing French daily Liberation accepted an offer by the scion of a capitalist dynasty to purchase a hefty portion of its stock.

The vote, taken on Thursday, was close. But in the end the survival instinct was stronger than ideology, and Edouard de Rothschild, the 47 year-old son of the banker Baron Guy de Rothschild, became the newspaper's largest shareholder.

For 20 million euros (US$26 million), Rothschild acquired 37 percent of Liberation, which was founded in 1973 by philosopher Jean-Paul Sartre and current publisher Serge July as what one writer has called "a Maoist instruction sheet."

Because it has nurtured and marketed an anti-authoritarian, anti-big business identity, the move to open itself to a capitalist heavyweight like Rothschild is deeply significant for the entire French newspaper industry.

Like almost all French dailies, Liberation has in recent years suffered from competition provided by the Internet, television and free dailies, such as the Swedish-based Metro, which has 42 daily editions in 17 countries, including France.

As a result, Liberation and other major French newspapers have suffered substantial drops in circulation and advertising revenue.

New capital

According to July, the new capital will help the paper lower prices and improve distribution, editorial and online activities.

"We judge these [improvements] indispensable to meeting the challenges of the media Big Bang," July wrote in Liberation last month when announcing the opening of negotiations with Rothschild.

Even though the deal gives Rothschild the chance to increase his share of the paper to 52 percent by 2007, he has accepted a 40 percent ceiling on his voting rights.

Nonetheless, many observers remain troubled.

"On a symbolic level, it's shocking," Pierre Defassieux of the main French journalists' union SNJ told Forbes magazine. "It just shows how difficult it's becoming to sustain an independent press in France."

Rothschild has vowed "not to interfere in the paper's editorial content." But that promise was also made by entrepreneur Serge Dassault after he purchased Socpresse, the company that owns another major French newspaper, Le Figaro, as well as other publications.

He reportedly also told editors not to publish stories that attacked France's "commercial and industrial interests," and staff claimed that stories about his company, Dassault Aviation, were soon dropped.

Severance payments

As a result, some 10 percent of all Socpresse journalists took advantage of a contractual clause allowing them to resign because of the deal, and Socpresse was forced to pay an estimated 15 million euros (US$19.5 million) in severance payments.

Stunning as it was, the Liberation deal will not be the last -- or biggest -- shock to the French media landscape.

The daily Le Monde, widely considered one of the world's great independent newspapers, is currently in negotiations to have one of the country's most successful conglomerates, the Lagardere group, purchase 15 percent of its stock.

With circulation down some 5 percent over the last two years, Le Monde is seeking a 50 million euro infusion to help cover debts of up to 130 million euros.

When the deal with Lagardere is finally announced, perhaps later this month, France's entire media landscape will have been transformed.